U.S. restrictions on exports of personal protective equipment are not expected to have a significant impact on U.S. industry, particularly because most U.S. companies produce those goods overseas, trade observers said. Companies have been more heavily impacted by recently announced Chinese restrictions on medical exports, which have caused customs delays and a backlog of shipments, the U.S.-China Business Council said.
Ian Cohen
Ian Cohen, Deputy Managing Editor, is a reporter with Export Compliance Daily and its sister publications International Trade Today and Trade Law Daily, where he covers export controls, sanctions and international trade issues. He previously worked as a local government reporter in South Florida. Ian graduated with a journalism degree from the University of Florida in 2017 and lives in Washington, D.C. He joined the staff of Warren Communications News in 2019.
Although the U.S. provides broad exemptions for humanitarian exports to Iran, the exemptions continue to be a source of confusion for industry, which is hindering humanitarian trade with Iran, said Katherine Bauer, a former senior policy adviser for Iran at the Treasury Department. The Treasury’s Office of Foreign Assets Control may issue guidance to clarify the exemptions, Bauer said, but the Trump administration is unlikely to make any major changes to its Iranian sanctions regulations.
The U.S. should introduce support measures for U.S. technology industries that are “too critical to fail,” especially those competing for market share with China, the Information Technology and Innovation Foundation said in an April 13 report. As the Commerce Department seeks to restrict sales of emerging technologies to counter Chinese technology theft (see 2004010007), Congress should task the administration with expanding funding for research in those key fields -- including robotics, artificial intelligence and semiconductors -- and target it to “maximize commercialization” of the technologies in the United States. Congress should also support an “industrial investment bank” to increase advanced production in the U.S. and “encourage” the relocation of critical technology production from China to the U.S., the ITIF said.
After current and former lawmakers asked the Treasury Department to clarify its stance on humanitarian exports to sanctioned countries, the agency pushed back on accusations that sanctions are stopping those exports, saying it does not target legitimate exported aid. Some of those accusations are marred by a misunderstanding of Treasury’s general licenses and exemptions, said sanctions lawyer Doug Jacobson: they do allow a broad range of humanitarian exports to countries like Iran.
As industry sees an increase in parties invoking force majeure clauses (see 2002140027) due to the COVID-19 pandemic response measures, courts will more closely review force majeure disputes to determine whether companies are simply trying to escape a difficult economic situation, commercial litigation lawyers said. Before invoking the clause, parties should make sure compliance with their contracts is impossible due to the pandemic. “The courts … are going to be very astute to look for people trying to use COVID-19 as a force majeure excuse where actually the contract was just not economic for them anyway,” Sean Upson, a lawyer with U.K.-based Stewarts law firm, said during an April 9 webinar.
The U.S. is restricting exports of certain personal protective equipment due to the COVID-19 pandemic, the Federal Emergency Management Agency said in a notice scheduled for Federal Register publication on April 10. The restrictions, which took effect April 7 and will last 120 days after publication, apply to certain respirators, masks and gloves, FEMA said.
The U.S. should expand the scope of humanitarian license exceptions for exports to Iran and add staffing within the Treasury Department to speed up the licensing process, members of the European Leadership Network and The Iran Project said April 6. The statement, signed by 25 former U.S. and European government officials, also said the U.S. needs to do more to assure companies, banks and organizations they will not be targeted for exporting humanitarian items to Iran. The letter follows similar calls by U.S. lawmakers, who said sanctions are hindering life-saving exports to Iran (see 2004010019).
Technology and semiconductor trade groups are objecting to increased export restrictions under consideration by the Trump administration, saying the controls could lead to industry uncertainty with significant impacts on semiconductor companies. In an April 6 letter to Commerce Secretary Wilbur Ross, the groups urged the administration to request industry input before finalizing the rule, which reportedly includes three measures to tighten restrictions on China’s ability to obtain advanced U.S. technology (see 2004020012).
The Federal Aviation Administration does not independently vet civil aircraft registrations, which could lead to a host of sanctions related risks, according to a March report from the Government Accountability Office. In at least one case, the FAA allowed a sanctioned Venezuelan drug trafficker to obtain a dealer certificate, which gave his front company access to blocked planes for more than a year, the GAO said. FAA officials said they do not have the required authorities to address sanctions issues, but the GAO pointed to a lack of coordination between FAA and the Treasury's Office of Foreign Assets Control and a flawed FAA registration system.
The European Union will officially waive customs duties and value-added taxes on medical equipment imports from non-EU countries, the European Commission said April 3. The measure, signaled in a March 30 customs guidance (see 2003310030), was approved by the commission to help combat the COVID-19 pandemic after requests from member states. Import duties and VATs will be lifted for six months for masks, protective equipment, testing kits, ventilators and other medical equipment, the commission said, adding that the measure will take effect retroactively from Jan. 30. The EU may consider an extension after six months.